Rhone Poulenc: Ace after the takeover - Views on News from Equitymaster

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Rhone Poulenc: Ace after the takeover

Jan 17, 2001

Rhone Poulenc has declared impressive results with a 30.3% growth in net profit on the back of a 18% rise in the sales. The operating margins have increased by 90 basis points in the current quarter vis–a–vis the corresponding quarter of the last year. Rhone is the second biggest player in the Rs 4.84 bn cough and colds segment after Pfizer. It's product Phensedyl ranks only next to Pfizer's Corex in terms of market share. The product which grew by 21% last year, contributes more than 15% to the company's turnover.

(Rs m) 3QFY00 3QFY01 Change
Sales 517 610 18.0%
Other Income 21 33 53.7%
Expenditure 432 505 16.8%
Operating Profit (EBDIT) 85 106 24.1%
Operating Profit Margin (%) 16.4% 17.3%  
Interest 1 1  
Depreciation 7 7 -9.6%
Profit before Tax 98 131 33.5%
Other Adjustments   -  
Tax 34 48 39.7%
Profit after Tax/(Loss) 64 84 30.3%
Net profit margin (%) 12.4% 13.7%  
Earnings per share* 56.98 74.22  

A 40% stake in the company was recently acquired by Nicholas Piramal, which has made an open offer for another 20% stake under the SEBI guidelines at a price of Rs 875.

The stock quotes at Rs 760, which implies an earnings multiple of less than 11 times 3QFY01 annualised earnings.

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